I recently attended Digiday Exchange Summit in Miami and was thrilled to see that the concept of programmatic premium was right, front and center of the discussions on stage. At PubMatic we’ve always known that there was a better future for publishers than getting trapped in the low CPMs and bad ads of the early days, and RFP and IO-based selling of the present. And now a collection of agency execs and brand marketers from companies like Kellogg’s and Mediabrands, and top publishers like Forbes and Weather Channel came together to talk about new areas programmatic is expanding into.
The general consensus was that the next wave of growth in programmatic buying will come from brand dollars rather than direct response and that programmatic has a healthy multi-platform future in mobile and video. There was acknowledgement that RTB does not mean the replacement of a buyer-publisher relationship with technology, but instead it can enhance existing relationships through efficiency and transparency. Out goes a traditional RFP-based buying! As Ad.com’s Dave Jacobs, SVP Publisher Services said: “The biggest myth of RTB today is that the marketer will no longer want to talk to the publisher.” We’ve seen this through our own experience with clients, especially for Private Marketplaces. Technology is the enabler, while people buying and selling are freed up to communicate about strategy over minutia.
In order to get those brand dollars to go programmatic, there are a few key things that have to happen: transparency has to be increased, measurement needs to evolve beyond traditional CTR, publishers have to be able to exert control and RTB has to support non-standard ad units.. The transparency issue is an important one: in a marketers’ surveyconducted by Adap.tv, 91% of brands and 89% agencies believe viewability will be standardized within the next 12 months and marketers will no longer pay for ads that are not seen. I should note that comScore viewability metrics have been integrated into the PubMatic platform through PubLink, PubMatic’s enterprise app marketplace.
Video, a PubMatic initiative on our 2013 roadmap, is of course a hotly pursued format for brand marketers and has seen an explosive growth over the last few years. It is driven by growing video consumption on mobile and tablets, and growing video ad budgets which increased by 27% last year, and are expected to increase another 20% this year. Several panelists noted that video is about 12 months behind display in terms of programmatic sales. Video has a unique set of challenges that we don’t see in display. For us to see programmatic buying in video take off, we need to solve for the universal support across different formats and devices in the multi-device world; we need to develop a new set of measurements different from display (e.g., iGRP); and we need to achieve sufficient scale of inventory that has been scarce in the past. If we solve for these challenges, we can see programmatic sales in video grow from a single-digit percentages today to a meaningful share of total sales. Dan Masher, GM of Brightroll, a video exchange, expects that within 12 months programmatic will be 15 – 20% of their business.
In a State of the Industry panel, execs from Adap.tv, Horizon Media and The Weather Channel noted the current disconnect in agencies between those who buy digital video and those who buy TV although one is so often an extension of the other. But, as the Digiday survey pointed out, 78% of agency execs think they’ll do buying and planning of TV and video together in the future. We look forward to the day when demand partners can go into a platform like ours and get that network spot, plus online, plus mobile, plus tablet.
Day two closed out with an agency panel. Vik Kathuria, Managing Partner of GroupM/Mediacom stated that 10-15% of budgets are going to programmatic with a focus on getting brand dollars. Brendan Moorcroft, CEO of Mediabrands, noted that programmatic is the biggest growth opportunity for his agency globally. We couldn’t agree more.